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Mr Osborne last night revealed that the Treasury will next week release a study of the alleged immediate economic effects of an EU exit including on house prices.

The document is expected to trigger more anger about the Government producing questionable figures to back up the case for staying in the EU.

"One consequence of leaving the European Union is that there would be a hit to the value of people's homes of at least 10 per cent, and up to 18 per cent," Mr Osborne told the BBC.

"At the same time mortgages will get more expensive and mortgage rates will go up. Now some say that that would be a price worth paying. I say that we are stronger and better off inside the European Union."

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During a visit to Japan, The Chancellor warned that the UK would suffer a "profound economic shock"

The EU Commission report published earlier this week recommended that Britain build 220,000 more houses a year to keep up with demand from those including European migrants.

It said Britain should "take further steps to boost housing supply" as the new supply is currently at around 150,000 units a year, 70,000 a year short of the number of households being created.

Ukip leader Nigel Farage said on Twitter: "Uncontrolled EU migration places a huge burden on Britain's housing stock. European Commission lecturing us about building more houses when it's a crisis caused by EU open borders is a total insult."

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Osborne revealed the Treasury will release a study of the alleged economic effects of an EU exit

Tory Cabinet minister Chris Grayling, a Brexit supporter, said: "What we have is the EU telling us we are not building enough houses and yet telling us also that we have to accept unlimited migration from elsewhere in the European Union.

"There is just a fundamental democratic gap in all of this."

Downing Street yesterday denied that the European Commission had the power to order Britain to build houses.

A spokesman said: "We are not in a position of being ordered to build more homes by anybody.

"We want to see more homes built in the UK. The Prime Minister has talked about getting more homes built. The EU role in that - well, there isn't one."

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The housing supply is currently at around 150,000 units a year - 70,000 a year short

Responding to the Chancellor's remarks, Tory Energy minister Andrea Leadsom said: "This is an extraordinary claim and I'm amazed that Treasury civil servants would be prepared to make it.

"The truth is that the greatest threat to the economy is the perilous state of the euro - staying in the EU means locking ourselves to a currency zone - which Mervyn King, ex-Governor of the Bank of England, has rightly warned 'could explode'.

"The safer option in this referendum is to take back control of the vast sums we send to Brussels every day and Vote Leave on 23 June."